New land valuations likely to rise by 20% on average

The Treasury Department is preparing to announce an average increase of 20% in land valuations nationwide but it has not yet taken the impact from current flooding into account, says director-general Naris Chaiyasoot.

However, officials suggested the floods may give property developers an opportunity to buy land at lower cost in some areas where owners want to sell because they have faced flooding or fear future flood risk.

As well, general investors will see this as an opportunity to acquire cheap land to sell at a profit in the future.

The department’s new valuations are to be used for a base for calculating land transaction fees Jan 1 next year until the end of 2015. However, flood impacts may lead to some last-minute adjustments.

“The new price adjustments are based on purchase prices over the past three years while the floods have occurred only in the past two months. It’s too early to assess the impact of floods on land prices,” said Dr Naris.

In any case, he said, if the department sees any factor that significantly affects land prices, it can announce new appraisal rates during the new four-year period.

In addition to being used as a base for calculating fees, the department’s valuations are used as median prices by the market.

Land prices in Bangkok, especially in areas along existing and planned rail mass-transit routes, have risen dramatically, in some areas by 50% from the previous valuations.

While prices in prime tourist destinations such as Phuket and Chiang Mai have also risen as expected, Dr Naris said there had also been a surprising increase in the three southernmost provinces that have been plagued by sectarian violence for a decade.

 

 

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